Illinois Aims to Reduce Workers’ Comp to Help State Economy

Written by Ankin Law Office

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Governor Bruce Rauner is looking to reduce the cost of doing business in Illinois by cutting back on workers’ compensation and unemployment insurance, among other initiatives. The efforts are a part of his Turnaround Agenda, a plan to strengthen the state’s economy by attracting – and keeping – businesses.

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The Turnaround Agenda and Rauner’s plan to lower taxes and cut government spending in order to get the state’s budget under control are currently major topics of debate between the state’s two political parties.

Should Rauner’s plan go through, it may be more difficult for employees to receive workers’ compensation for injuries related to employment. In his outline, Rauner says the standard for compensation should go from “any cause” to “major contributing cause.”

This would mean that compensation would be granted only if a job-related accident is more than 50 percent responsible for the injury. Compensation would not be available for injuries suffered on the way to or from work or for pre-existing injuries aggravated on the job.

The plan would also put restrictions on what it means to be a traveling employee.

Workers’ compensation costs in Illinois are the seventh highest in the country, according to the Oregon Department of Consumer and Business Services. Rauner, a Republican, believes these costs are helping prompt the many businesses who are leaving for other states such as neighboring Indiana, where workers’ compensation costs are less than half.

Last month the governor went to Bloomington to promote his campaign, citing Caterpillar Incorporated’s decision to to move its mining division operations to Arizona as the kind of problem his proposed workers’ comp reform could help avoid in the future.

While his main goal is to improve the state’s economy, Rauner hopes that more conservative workers’ compensation standards will cut down on the amount of abuse and fraudulent practices currently taking place, not just by workers, but by pharmaceutical companies as well.

For example, it has recently come to light that Illinois doctors have been over-prescribing opioids through a process in which doctors can sell these painkillers to injured workers. Of course, employers are subsidizing these costs, but the bigger issue is that this practice, known as physician dispensing, often harms the injured worker’s health even further.

In addition to affecting workers’ comp, the governor’s plan would put certain restrictions on unemployment benefits, which he believes are being abused under the current system of laws as well, and union rights in locally approved zones. It would also limit damage awards in large-sum civil lawsuits.

Rauner has said that, if his reform passes, he will back an increase in the state’s minimum wage. His proposal would increase minimum wage by 25 cents an hour each year, starting in 2016. These increases would cease after 2022, when minimum wage will have reached $10 an hour.

Illinois Democrats would like the state to reach the $10 minimum wage sooner.

Indeed, state Democrats have proven to be an obstacle for the governor’s pro-business reforms thus far. They blocked his plan in May of 2015 and continue to fight many of its components. Labor unions have also spoken out against the agenda, claiming that employers would have less reason to create a safe work environment under the proposed circumstances.

The Illinois Trial Lawyers Association has been critical of the plan too.

Critics of Rauner’s plan say that Illinois is better off sticking to the workers’ compensation reform package that became law in 2011. They believe that workers already gave up enough rights under those terms for the sake of lowering business costs and should not have to sacrifice even more now.

Among the limitations imposed on workers by the 2011 reform were workers’ choice of doctor, recovery for hand injuries, and wage loss differential. The causation standard was raised at that time as well.

That is not to say that the governor’s opposition is ignoring the fact that Illinois is losing jobs to other states and does not have a budget plan. Democrats acknowledge the need to solve these issues, but admit that they have yet to come up with a solution of their own.

If Rauner does succeed in pushing his reform through, the state’s personal injury lawyers anticipate that many more workers’ comp cases will go to trial, as an even heavier burden falls upon the injured worker.

Recovering medical expenses, partial permanent disability, permanent total disability, temporary total disability, wage loss differential, vocational retraining, and even survivor benefits would be even more challenging for one who is not familiar with the new system of laws and how they would differ from the old one. It may also limit the number of doctors an injured worker can choose from.